By Lanny J. Davis & David B. Rivkin Jr.
Say this about Anna Nicole Smith: In a variety of ways, she brought together Americans
of all stripes. In an era of political division, she welcomed all in her various
endeavors.
That is her legal legacy, too. On Tuesday, the U.S. Supreme Court will, for the
second time, hear oral argument in a case arising from Ms. Smith’s bankruptcy and
her attempt to use that bankruptcy to get around the will of her deceased husband,
billionaire oilman J. Howard Marshall II. The case has brought together a wide coalition
of liberals, conservatives and people of all stripes concerned about one thing:
the constitutional guarantee that lawsuits will be decided by a fully independent
and impartial judge.
That is what brought the two of us to be hired to represent the National Black Chamber
of Commerce and the American Board of Trial Lawyers Advocates in filing an amicus
brief with the Supreme Court in this case — Mr. Davis, a liberal and former counsel
to a Democratic president; Mr. Rivkin, a conservative and former counsel to a Republican
president.
The facts of this case are fit for a tabloid. In the tumultuous final years of her
life, Ms. Smith claimed that she was owed hundreds of millions of dollars because
of a verbal promise Mr. Marshall had made prior to his death at the age of 91, less
than a year after their marriage. This despite that Mr. Marshall, while lavishing
her with millions in gifts, cut his newlywed wife out of his will.
At first, Ms. Smith pursued her claim in the usual manner, by challenging Mr. Marshall’s
will. In April 1995, she brought her claim in a Texas probate court, arguing that
the elder Mr. Marshall had promised a substantial portion of his estate but that
Mr. Marshall’s son, E. Pierce Marshall, had illegally blocked that promise from
being carried to leave more money for himself and others named in the final will.
Pierce, in turn, sued Ms. Smith for defamation. But before a jury could hear that
case, she filed for bankruptcy, under very suspicious circumstances, in a California
court. (Meanwhile, a Dallas jury found that her attorney had in fact defamed Pierce.)
When Mr. Marshall filed a claim in the bankruptcy court to prevent his defamation
suit from being wiped out, which is what usually happens in bankruptcy, Ms. Smith
turned around and slapped him with the same claims that she had made in the Texas
case.
The result was to give Ms. Smith two bites at the apple: once in the Texas court,
where her claims would have to face a fact-intensive jury trial, and again in the
bankruptcy court, where they would face far less scrutiny. Some observers said the
bankruptcy case was manufactured for just this purpose.
Just as the Texas jury trial was getting under way, the bankruptcy judge ruled in
Ms. Smith’s favor, awarding her over $450 million. The judge heard evidence over
the course of just a couple days and showed an unusual hostility to Pierce’s case
The Texas jury trial, by contrast, was just like in the movies. The jury heard evidence
for five months from more than 40 witnesses, with extensive questioning and cross-examination
from both sides. It reached a unanimous verdict: Mr. Marshall had never promised
to put Ms. Smith in his will or give her hundreds of millions — or anything. In
effect, Ms. Smith had lied.
Here’s where the legal issues get complicated. The basic question is, which verdict
stands, the one reached by the Texas jury after a five-month trial or the quick
decision of a bankruptcy judge? Usually, the first judgment is the one that controls,
but there’s a quirk: Because a bankruptcy judge isn’t a “judge” under the Constitution,
he can’t enter a final judgment in cases that aren’t “core” to the bankruptcy process.
Instead, a federal judge — one appointed by the procedures specified in the Constitution
and totally insulated from political pressure — has to review the evidence and make
his own decision. As a matter of law, that’s the final decision.
The bankruptcy court’s judgment was first in time, but if Ms. Smith’s claim that
Mr. Marshall illegally interfered to keep her out of the will is “non-core,” then
the Texas decision was first in law. Hundreds of millions of dollars hang in the
balance.
So do fundamental guarantees of independent judges, constitutional fidelity and
justice. These are what’s brought together a strange-bedfellows coalition of liberals,
conservatives and independents, all standing up for the Supreme Court to take Article
III of the Constitution, which lays out the requirements for judges and the courts,
as seriously as the Framers intended.
The position taken by Ms. Smith’s estate offends progressives, who do not want a
plaintiff in a state civil rights case to be vulnerable to being trumped by a decision
by a bankruptcy court. A bankruptcy judge is not required to abide by the Seventh
Amendment’s right to a trial by jury, nor the various due-process rights protected
by the rules that govern Article III-federal judges cases. Bankruptcy judges were
created by Congress under Article I of the Constitution to relieve Article III judges
of the need to preside over complex and arcane bankruptcy cases that have little
to do with the usual subject matters before the courts. Under the Constitution,
Congress couldn’t do any more than that, such as reassigning typical lawsuits to
non-Article III judges. And indeed, Congress didn’t intend to give bankruptcy judges
final decisionmaking authority over “non-core” bankruptcy issues, things that go
beyond the simple adjudication of debtors’ and creditors’ rights.
At the same time, the position taken by Ms. Smith’s attorneys also offends conservative
principles. First, it would allow a judge created by Congress to intrude on the
independent, final decisionmaking powers of federal judges, expressly invested with
such powers by Article III of the Constitution. Second, it would ignore federalist
principles deferring to the states, such as state court systems, except for where
the Constitution expressly provides for overriding state legal authority.
One hopes that the Supreme Court’s liberals and conservatives will find the same
common ground as we did in submitting a brief to the court on behalf of the National
Black Chamber of Commerce and the American Board of Trial Advocates.
It is noteworthy that four federal judges in the courts below all agreed that a
bankruptcy judge cannot have “final” decisionmaking authority over “non-core” bankruptcy
issues, even for the kind of claim brought by Ms. Smith, and that Article III courts
must retain final authority to decide such “non-core” issues.
It might not be easy nowadays for liberals and conservatives to come together and
agree on anything. But the good news is that, at least in this case, the attorneys
representing the Smith estate managed to accomplish one “purple” moment when liberals
and conservatives can come together and agree on the importance both of protecting
due process and the right to jury trials, as well as strictly construing the right
of Article III judges to make final decisions on “non-core” bankruptcy issues.